NEWSFLASH - Brazil: new legislation to reduce informality in insurance

The Brazilian insurance market, and especially Brazilian consumers and society, took an important step to reduce informality in insurance on Tuesday (May 22) when a Complementary Law Project (PLC 3139/2105) was passed in the special committee of the Congressional Chamber.

The legislation deals with the irregular operation of cooperatives and associations. Following the passing of the Complementary Law Project (PLC), associations and cooperatives will be defined as self-management entities and will pay taxes in the same way as traditional insurance companies. Additionally the PLC provides insurance cooperatives and self-management entities a possibility to seek reinsurance coverage. 

The president of the Fenacor (Federação Nacional dos Corretores de Seguros Privados e de Resseguros, de Capitalização, de Previdência Privada, das Empresas Corretoras de Seguros e de Resseguros) Armando Vergilio said:

"The approved text is excellent for society. Everything is less difficult when forces of the good and the insurance market act in synergy, united. "

Armando Vergilio recalls that this was a "losing battle" just over two years ago when the irregular performance of associations and cooperatives grew rapidly in different parts of the country undermining consumer confidence and trust in the insurance sector.

If approved by the Senate, the associations and cooperatives that sell the so-called “vehicle protection” will have a period of 180 days to adapt to the new legal and regulatory framework of SUSEP and CNSP.

For more information, visit the CQCS website (Portuguese only).